OSL Group Limited (HKEx: [insert code]) 2025 Annual Report – Comprehensive Investor Update

Key Financial Highlights

• Significant Balance Sheet Expansion: As of 31 December 2025, total assets soared to HK\$4,645.3 million, up from HK\$1,863.7 million in 2024. Shareholder equity more than doubled to HK\$3,285.7 million (2024: HK\$1,284.3 million). Total liabilities increased to HK\$1,359.6 million (2024: HK\$579.4 million). Gross gearing ratio improved to 29.3% from 31.1%.
• Substantial Growth in Proprietary Digital Assets: The Group’s own digital assets held for trading jumped to HK\$1,132.8 million from HK\$406.6 million a year earlier, reflecting aggressive expansion in digital asset transaction services globally.
• Healthy Cash Position: Net cash (after client and restricted balances) was HK\$1,135.0 million, up from HK\$621.4 million in 2024.
• Income from Digital Assets and Blockchain Platform Business: For the year ended 31 December 2025, IFRS income from this segment was HK\$488,773,000, a substantial increase from HK\$374,747,000 in 2024.
• Gearing and Liquidity: Digital asset borrowings remained low at HK\$7.1 million, with HK\$6.4 million secured against HK\$15.3 million of digital assets.

Major Corporate Actions & Equity Fundraising

• Major Share Placement and Subscription: On July 25, 2025, OSL Group entered agreements to issue 158,056,000 new shares at HK\$14.90 each (about a 15.34% discount to the previous closing price of HK\$17.60). The net proceeds were approximately HK\$2,336 million, completed in August and October 2025. The capital will be deployed as follows:
  • 50% for strategic acquisitions
  • 30% for global business development and new initiatives
  • 20% for general corporate purposes
• Utilisation of Proceeds: Proceeds from both the January 2024 and 2025 subscriptions have been fully utilised as intended, supporting ongoing and future expansion.
• Subsequent to Year-End: On January 28, 2026, an additional placing and top-up subscription was announced, raising expected gross proceeds of HK\$1,560 million (net: HK\$1,549.9 million) through the sale and subscription of 104,698,000 shares at HK\$14.90 each.
• Share-Based Awards: On January 29, 2026, 5,428,770 awarded shares were granted to 154 participants, including directors and key employees, under the 2025 Share Award Scheme, to reward past contributions and incentivise future performance.

Major Strategic Developments

• Acquisition in Japan: On January 17, 2025, OSL completed the acquisition of an additional 30.38% in OSL Japan, further strengthening its expansion in the Asia-Pacific region.
• Global M&A Focus: The Group is actively pursuing accretive M&A opportunities to accelerate overseas expansion, with 50% of recent share proceeds earmarked for strategic acquisitions.
• Growth in Digital Asset Services: The Group offers stablecoin payment, OTC, iRFQ, digital asset custody, omnibus and SaaS services, and automated trading, with increased IT infrastructure and compliance to support cross-jurisdictional growth.

Risk Factors and Controls

• Price Volatility of Digital Assets: The Group’s performance is sensitive to digital asset price movements. 37% of trading assets and 45% of liabilities are in stablecoins as of 2025 (up from 5% and 11% in 2024), mitigating some price risk. A 0.2% move in non-stablecoin digital asset prices could materially impact earnings.
• Liquidity and Capital Risk: The Group maintains prudent liquidity policies and contingency funding plans. It is currently well-capitalised, and OSL Digital Securities Limited and associated entities comply with regulatory capital requirements.
• AML/KYC and Regulatory Compliance: Strict AML, KYC, and KYB controls are in place, with ongoing monitoring and industry best practices in response to the evolving regulatory environment.
• Technology and Security: Proprietary technology and IP are protected through rigorous controls, encryption, penetration testing, and staff training.
• Performance and Contractual Risks: SaaS agreements include remedies for non-performance, and the Group limits contractual liabilities through strict internal contract reviews.
• Investment Risk: All significant investments undergo thorough risk and legal review, with ongoing monitoring by senior management and escalation protocols.

Corporate Governance and Shareholder Rights

• Governance: The company reaffirms its commitment to high standards of corporate governance, transparency, and accountability. The Board and various committees (Risk, Audit, Remuneration, Nomination) actively review policies, risk, and compliance.
• Shareholder Communication: Multiple channels exist for investor engagement, including regular reports, conference calls, webcasts, and a dedicated investor relations website. Policies on dividends and communication are reviewed annually.
• Dividend Policy: The Board has resolved not to recommend a final dividend for 2025. The dividend policy remains focused on balancing shareholder returns with future growth and capital requirements.
• Share Option & Award Schemes: The company operates both share option and share award plans to incentivise directors, staff, and service providers. The 2018 Share Award Plan was terminated in May 2025 and replaced by a new scheme.
• Sufficiency of Public Float: The company confirms maintenance of required public float under HKEx rules.

Ownership Changes and Major Shareholders

• Largest Shareholder: Crown Research Investments Limited (formerly BGX Group Holding Limited), controlled by Liu Shuai via DeltaByte Holdings, owns 29.59% of the company (235,118,000 shares as of 31 December 2025).
• Directors’ Interests: No material changes in directors’ interests in shares; all disclosures in compliance with SFO and Listing Rules.

Other Noteworthy Items

• Revenue Concentration: The top 5 clients accounted for 27% of group income (largest: 17%), and the top 5 suppliers for 36% of purchases (largest: 13%). No director, major shareholder, or associate had a beneficial interest in major clients or suppliers.
• No Significant Contingent Liabilities: As of 31 December 2025 and 2024, there are no significant contingent liabilities.
• Compliance: The Board confirms awareness of and compliance with all material legal and regulatory requirements; no known material breaches during the year.
• Subsequent Events: In addition to the share placing and awarded shares in January 2026, the Group has evaluated all subsequent events through 31 March 2026 and found no further items requiring disclosure or adjustment.

Potential Share Price Sensitivities

• Major Capital Raising: The ongoing equity fundraising and large share issuance at a discount could impact share price both through dilution and the market’s view of the company’s growth trajectory and acquisition plans.
• Significant Expansion in Digital Asset Holdings: The more than doubling of digital asset holdings and global expansion may increase the company’s exposure to market volatility, but also positions it as a leading Asia-Pacific digital asset platform.
• Acquisitions and Expansion: Aggressive plans for strategic acquisitions and new business lines (including in Japan and other overseas markets) may drive future revenue but also introduce integration and execution risks.
• No Final Dividend: The Board’s decision not to propose a final dividend for 2025 may disappoint some income-focused investors, but the stated policy is to prioritise growth and capital needs.
• Regulatory and Market Risks: The report highlights ongoing regulatory, technology, and price risks inherent in the digital asset sector that could impact future performance and valuation.

Disclaimer

This article is a summary and analysis prepared for informational purposes only and does not constitute investment advice or a recommendation to buy or sell securities. Investors should review the full annual report and consult professional advisers before making any investment decisions. The information is as of the date of the OSL Group Limited 2025 Annual Report and may be subject to change or updates.

View OSL GROUP Historical chart here